Answer:
We have to journalize the transactions:
1. Stockholders invest $40,000 in cash in starting a real estate office operating as a corporation.
Account Debit Credit
Cash 40,000
Common Stock 40,000
2. Purchased $500 of supplies on credit.
Account Debit Credit
Supplies 500
Accounts Payable 500
3. Purchased equipment for $25,000, paying $3,500 in cash and signed a 30-day, $21,500, note payable.
Account Debit Credit
Equipment 25,000
Cash 3,500
Accounts Payable 3,500
4. Real estate commissions billed to clients amount to $4,000.
Account Debit Credit
Accounts Receivable 4,000
Service Revenue 4,000
5. Paid $700 in cash for the current month's rent.
Account Debit Credit
Cash 700
Rent Expense 700
6. Paid $250 cash on account for office supplies purchased in transaction 2.
Account Debit Credit
Cash 250
Accounts Payable 250
7. Received a bill for $800 for advertising for the current month.
Account Debit Credit
Advertising Expense 800
Accounts Payable 800
8. Paid $2,500 cash for office salaries.
Account Debit Credit
Cash 2,500
Wages Expense 2,500
9. Paid $1,200 cash dividends to stockholders.
Account Debit Credit
Cash 1,200
Dividends 1,200
10. Received a check for $2,000 from a client in payment on account for commissions billed in transaction 4.
Account Debit Credit
Cash 2,000
Accounts Receivable 2,000
